SYNDICATION OPPORTUNITIES AND ROAD PROJECT FINANCING

PRASHANT GHARAT ROLL NO. 17

Industrial Development Bank of India IDBI Bank Ltd. (IDBI) is today one of India's largest commercial Banks since last 40 years. IDBI Bank Limited is an India-based commercial bank. The Bank operates in three segments wholesale banking, retail banking and treasury services. As on March 31, 2012, the Bank had a network of 973 Branches and 1542 ATMs. The Bank, besides its core banking and project finance domain, has a presence in associated financial sector businesses like capital market, investment banking and mutual fund business. Corporate office in Mumbai,

Products and Services

IDBI Bank offers a wide collection of products and services to its customers. For different customer groups and needs, there are different types of products and services including

Personal Banking Corporate Banking SME Finance and Agri Business etc.

OBJECTIVES PRIMARY OBJECTIVE Overview of syndication loan in the debt financing. The Role of syndication & term loan syndication To identify loan syndication process and its major participation in bank. SECONDARY OBJECTIVE To identify issues involved and opportunities in Road Project Financing. The role of Infrastructure financing in development of different sectors especially on road financing. RESEARCH METHODOLOGY Given the objectives of the projects the following Research Methodology was adopted: Interaction with the project guide and key officials in the Syndication, Structuring and Advisory Department. Articles from Infrastructure magazines. Desk research, Internal circulars/ guidelines Library Research
LIMITATIONS

The nature of the project involves in-depth study under all dimensions of Road Project financing; which in itself is a vast specialized field of study, and 8 weeks of study limited this study to an overview of the Road Project Financing.

INTRODUCTION OVERALL SYNDICATION

The purpose of this note is to provide guidance on various aspects of a syndicated loan transaction, focusing on the following:

The type of borrowing facilities commonly seen in a syndicated loan agreement; A description of the parties to a syndicated loan agreement and an explanation of their role; A brief explanation of the documentation entered into by the parties; The time line for a typical syndicated loan transaction; and

A description of the common methods used by lenders to transfer syndicated loan participations.

OPPORTUNITIES IN ROAD SECTOR

NHAI

plans to award about 3,000 kms of highway projects on OMT basis.

Government of India planning a greenfield National Expressway grid of

approximately 18,000 km. Expected investment of approximately USD 40 Billion in State Highways in 12th Five Year Plan (2012-17). Gujarat alone plans to develop more than 45,000 km of highway by 2020.

OVERVIEW OF THE BIDDING PROCESS

Types of Projects NHAI undertakes

1. Build Operate and Transfer (BOT) 2. Externally Aided Projects 3. NHAI funded Projects

Request for Qualifications (RFQ) Concession Agreement?

ROAD AND HIGHWAYS (INVESTMENT)

Investment on roads and highways to increase over the next 5 years, led by government momentum to the roads and highways sector National highways drive increase in overall investments of Rs. 6.3 trillion over 2012-13 to 2016-17 Private participation in state roads is expected to gradually increase over the next 5 years (between 2012-13 and 2016-17).

RISE IN OVERALL INVESTMENT IN ROADS SECTOR (RS.BILLION)

6,342

3,393

2007-08 to 2011-12

2012-13 to 2016-17

OVERALL CONCLUSION
Debt

syndication is the important source of financing for the company. As India is growing its economy is booming it needs a good support from its banks so that the money can be utilized effectively for the development of the country. plays an important role in development of any economy.

Infrastructure

Debt syndication is an effective lending product for a bank and institutions which diversifies the risk of project funding and stand for the government norms and also helps the project in developing by giving end to end services.

All the above information I had to conclude that NHAI forecasting Investment in road sector over next 5 years and the overall bidding process and various road sectors are include in road project financing.